The idea, set out in a position paper by dena with the Institute for Public Economics at the University of Cologne (FiFo), build on the Government’s earlier announcement to cap the renewables levy to 6.5 ct/KWh in 2021, and further to 6 ct/kWh in 2022.
This measure would be worth 11 billion Euros and would be part of Germany’s wider 130 billion Euro coronavirus stimulus package.
A slower reduction of the EEG levy down to zero in the years until 2030, combined with a rise of the electricity tax to 4.1 cent, would led to an overall power price reduction of 4.5 ct/kWh.
“Only this fundamental restructuring of the renewables levy and the electricity tax will make it possible to achieve considerable simplifications in energy law, relieve companies and authorities of the burden of enforcement and processing and thus achieve further economic benefits,” economist at dena and FiFo conclude.
The German end-customer power price is subject to taxes and levies that make electricity expensive despite a steady decline in wholesale power prices over recent years. However, as electrification progresses and the share of green energy sources are set to replace fossil fuels not only for power generation but also in heating and transport, dena says the “the electricity price has become an essential lever to steer the development” and help achieve Germany’s net zero emission targets.